Mark Cuban - The #1 Reason Why Most People Fail In Business

Summary

The speaker emphasizes the importance of hard work and continuous learning as key to success in business. He argues that failure often stems from a lack of effort and knowledge about one's industry. Competitiveness is highlighted as a driving force, where understanding one's strengths and the importance of being prepared and focused are crucial. The speaker also stresses the value of formal education, particularly in subjects like accounting and finance, for building a strong foundation in business. Lastly, he touches on the necessity of having a healthy level of paranoia to stay ahead of competition and the importance of gaining the first customer to kickstart business growth.

Takeaways

• 📚 The number one reason for failure is not putting in the effort to learn and understand one's industry and business deeply.
• 🧠 Success in business requires a combination of brains and effort, and being better prepared and more knowledgeable than the competition.
• 💪 Entrepreneurs should be self-motivated and willing to work hard, even if it means doing tasks that others might not expect.
• 🏀 Discipline and focus are key traits for success, as illustrated by the example of NBA player Dirk Nowitzki's dedication to his craft.
• 🚀 Entrepreneurs should have a clear understanding of their skill set and apply it effectively within their chosen industry.
• 💼 The importance of formal education in business fundamentals such as accounting, finance, and marketing cannot be overstated.
• 📈 Continuous learning is crucial in business due to its ever-changing nature; staying ahead requires constant acquisition of knowledge.
• 🤔 Entrepreneurs can be identified by their passion, focus, and preparation, which are evident in the questions they ask and their understanding of the business.
• 🚀 A healthy level of paranoia about competition is beneficial, as it drives entrepreneurs to anticipate challenges and stay ahead.
• 🔑 The speed of business growth depends on understanding one's skill set and the lifecycle of the business, as well as focusing on low-hanging fruit for quick wins.
• 📞 Personal involvement in the business, such as making sales calls, demonstrates commitment and sets an example for the team.

Q & A

What is the number one reason people fail according to the speaker?

The speaker believes the number one reason people fail is because they don't do the work and don't learn enough about their industry or business.

Why is it important to know more about your industry than anyone else?

It's important because in a competitive environment, having more knowledge about your industry and customers gives you an advantage and helps you avoid losing to competitors who know more.

What does the speaker suggest is the key to success in business?

The speaker suggests that the key to success is a combination of hard work, continuous learning, and understanding your skill set to find the right place to use those skills effectively.

How does the speaker describe the importance of education in business?

The speaker emphasizes the importance of education, particularly in areas like accounting, finance, marketing, and sales, as these are the fundamental languages of business and necessary for effective communication and decision-making.

What is the speaker's view on the role of paranoia in business?

The speaker views a healthy level of paranoia as beneficial, as it drives one to anticipate competitors' moves, not to underestimate them, and to always be aware of the need to stay ahead through continuous learning and improvement.

How does the speaker define 'peril' in the context of entrepreneurship?

In the context of entrepreneurship, 'peril' is defined by the speaker as the constant threat of competition and the necessity to outperform and outwork others to avoid being outdone.

What is the speaker's perspective on the value of a college education for an entrepreneur?

The speaker believes that a college education is valuable as it provides a foundation in the language of business, such as accounting and finance, and teaches one how to learn, which is crucial for adapting to the ever-changing business environment.

How does the speaker relate the concept of 'low-hanging fruit' to business growth?

The speaker relates 'low-hanging fruit' to identifying what customers are willing to commit to, either through time or revenue. This initial commitment helps in learning and growing the business, making the next steps in growth faster and more informed.

What is the speaker's approach to dealing with competition?

The speaker's approach is to be paranoid and proactive, by trying to understand what the competition is doing, not underestimating them, and working harder to stay ahead.

How does the speaker describe the process of growing a business?

The speaker describes the process as starting with securing the first customer, learning from that experience, and then using those lessons to acquire the next customer more quickly, gradually increasing the speed and volume of growth.

What example does the speaker give to illustrate the importance of personal involvement in business?

The speaker gives the example of personally making phone calls to former season ticket holders when he bought the Dallas Mavericks, emphasizing that personal involvement and willingness to do the work are crucial for business success.

Outlines

00:00

🚀 The Key to Business Success: Hard Work and Continuous Learning

The speaker emphasizes the importance of hard work and continuous learning as the primary reasons for success in business. They argue that failure often stems from a lack of effort and knowledge, particularly in the face of competition. The speaker highlights the necessity to understand one's industry deeply and to stay ahead of competitors through dedication and discipline. They also touch on the innate qualities some people have for business, such as a natural inclination towards it and the ability to learn quickly. The importance of education in business fundamentals like accounting and finance is stressed, as is the value of learning how to learn as a means to adapt to the ever-changing business landscape.

05:02

🤓 Identifying Entrepreneurial Potential and the Role of Paranoia in Business

This paragraph delves into the speaker's ability to assess an individual's potential for entrepreneurship based on their passion, focus, and preparation. It discusses the multitude of factors that contribute to business success and the speaker's method of gauging a person's awareness and handling of these factors. The speaker also talks about the importance of having a healthy level of paranoia in business, anticipating competitive moves, and not underestimating the competition. They provide insights into how they would approach growing a business, emphasizing the need to understand one's skill set and the company's lifecycle, as well as the importance of securing initial customer commitments to fuel business growth.

10:02

🛒 The Art of Customer Acquisition and Growth Strategy

The speaker shares insights on the process of acquiring customers and the strategy for business growth. They discuss the importance of learning from each customer interaction to improve and speed up the process of acquiring subsequent customers. The paragraph also touches on the idea of 'low-hanging fruit', focusing on what customers are immediately willing to pay for or integrate into their lives. The speaker advocates for a proactive approach, as seen in their example of personally calling former season ticket holders to boost sales for the Dallas Mavericks. The summary underscores the importance of persistence, hands-on involvement, and the iterative process of growth in business.

Keywords

💡Failure

Failure in the context of the video is presented as a result of not doing the necessary work or learning about one's industry. It is defined as the lack of effort or knowledge that leads to not being able to compete effectively. The video emphasizes that people fail primarily because they do not put in the effort to know more about their business or industry, which is a critical aspect of success.

💡Success

Success is portrayed as a combination of hard work, continuous learning, and understanding one's industry better than anyone else. It is defined as the outcome of outworking and outsmarting competitors. The video suggests that success is not just about having talent but also about the discipline and focus to apply that talent effectively in business.

💡Competition

Competition is a central theme in the video, referring to the presence of other businesses or individuals who are knowledgeable about the same industry. It is defined as the challenge that one must overcome by knowing more about the business and being better prepared. The speaker uses the term to highlight the importance of being knowledgeable and prepared to win in a competitive environment.

💡Effort

Effort is described as a crucial component for success in business. It is defined as the work one puts into learning about their industry and business to gain a competitive edge. The video emphasizes that most people fail because they do not put in the necessary effort to understand their business or industry deeply.

💡Knowledge

Knowledge is presented as a key to success and a defense against failure. It is defined as understanding one's industry, business, and customers deeply. The video suggests that having more knowledge than competitors is essential for winning in business and that a lack of knowledge can lead to losing out.

💡Business Acumen

Business acumen refers to the ability to grasp and apply knowledge of business principles. It is defined as the skill set that allows one to understand and navigate the business world effectively. The video highlights that having business acumen, such as knowledge of accounting and marketing, is vital for running a successful business.

💡Accounting

Accounting is mentioned as a fundamental aspect of business that one must understand. It is defined as the systematic recording, reporting, and analysis of financial transactions. The video stresses the importance of having a grasp of accounting to avoid being at a disadvantage when running a business.

💡Learning

Learning is portrayed as an ongoing and essential process for anyone in business. It is defined as the acquisition of new knowledge or skills through study, experience, or being taught. The video emphasizes that continuous learning is crucial for adapting to the ever-changing business landscape and staying ahead of competitors.

💡Passion

Passion is identified as a key trait of successful entrepreneurs. It is defined as a strong and barely controllable emotion that drives one's actions and decisions. The video suggests that passion, combined with focus and preparation, is a strong indicator of potential success in entrepreneurship.

💡Paranoia

In the context of the video, paranoia is used in a positive sense, referring to a healthy level of concern for the competition and the need to anticipate their moves. It is defined as a mindset that keeps one vigilant and proactive in the face of potential threats to their business. The video suggests that a degree of paranoia can be beneficial in driving one to stay ahead of competitors.

💡Growth

Growth is discussed in terms of the speed and strategy for expanding a business. It is defined as the process of increasing in size, value, or importance. The video highlights the importance of understanding one's skill set and company lifecycle to determine the appropriate pace of growth, as well as the need to learn from each customer interaction to accelerate growth.

Highlights

The number one reason for failure is a lack of effort and not doing the necessary work to learn and succeed in one's industry.

Competing in business requires knowledge and understanding of the industry to outperform competitors.

Discipline and focus, combined with natural talent, contribute to success, as exemplified by NBA player Dirk Nowitzki.

Identifying and utilizing one's skill set effectively is crucial for business success.

The importance of working harder and being better prepared than competitors to stay ahead in business.

The speaker's early business ventures at a young age, such as selling baseball cards, as a foundation for learning business skills.

The necessity of understanding accounting and finance for running a successful business, even if one can hire experts.

The value of formal education in business fundamentals like accounting, finance, marketing, and sales.

Learning how to learn is more important than the specific knowledge gained, due to the ever-changing nature of business.

The importance of continuous learning and the acquisition of knowledge to stay competitive in business.

Assessing an entrepreneur's potential for success through their passion, focus, and preparation during interviews.

The significance of asking the right questions as an indicator of an individual's preparation and understanding of business.

The role of a healthy level of paranoia in business to anticipate and counteract competitive threats.

The strategy of focusing on low-hanging fruit and securing customer commitments to grow a business.

The importance of personal involvement and willingness to do the work, even in tasks that may seem beneath one's status.

The process of growing a business by learning from each customer and using that knowledge to acquire the next one more quickly.

The speaker's personal experience of making phone calls to former season ticket holders to grow the Dallas Mavericks' fan base.

Transcripts

out of all the reasons in the world and

I've regular but you have the talent you

know all these keys to success etcetera

what would you say is the number one

reason why people fail not necessarily

why they make you the complete opposite

right lack of brains lack of effort lack

of brains lack of effort yeah they just

don't do the work they don't learn you

know when you walk in the room but when

you start a business and you start to

talk about somebody you're never in a

vacuum with no competition you know

unless you're just extremely lucky and

if there's going to be competition that

means somebody else knows your business

as well as you do when you get started

and if you walk into a competitive

environment and they still know more

about the business than you do more

about your customers you're going to

lose and but most people don't consider

that they don't do the work they don't

learn more about their industry they

don't know even about their business I

mean and so you've got to put in the

effort to know more about your industry

than anybody else now and that's that's

the brains part and that's the effort

part as well because look if you're

competing with me you you better know

what you're doing otherwise I'm gonna

kick your ass

you know and you're not gonna outwork me

and so you know the combination is

usually what kills businesses early on

more than anything you know alluded to

earlier about entrepreneurs being born

or built you know and I think they're I

knew I was wired to be excited about

business how or why I don't know but you

know and there's certain guys they have

the genetics to jump out of the gym

right certain guys you know that you

know when they golf they have the muscle

memory and and the discipline you know

Dirk Nowitzki may not be the most

talented guy in the NBA but his

discipline and his focus to do what's

necessary to be successful he's willing

to do and combine it with being seven

feet tall and being skilled you know it

makes him an amazing basketball player

so it's it's understanding what your

skill set is finding the right place to

use those skills and then going for it

you know will that make you 250 grand

if you pick the right industry but

whatever industry you pick if you

outwork everybody if you try to be a

little smarter than everybody if you try

to be a better salesperson and everybody

if you try to be better prepared than

everybody you've got your best chance

because if you don't do it and somebody

else does you I have the same work like

someone's trying to take it all away

from you you know we're actually working

like someone's spending 24 hours working

24 hours to take it all away from you

and that's kind of the way I look at it

you know I started my first business

when I was 12 I was buying and selling

baseball cars buying and selling stamps

anything I could do to make money I was

hustling and trying to do so I was into

business but I not so much work it was

all my friends were into it with me so

they wouldn't know any spell cards yeah

baseball cards you name it I mean I grew

up in Pittsburgh and so I would probably

even less than 12 years old I would go

up by a bunch of baseball cards that I

collected and I would package I would

say okay you're guaranteed to have a

Pittsburgh pirate in this package and I

would charge three times as much and I'd

set up on this park bench down in the

park down it's got Township where I grew

up and I'd have these little sails and

it was great I made money you know I

mean it was you know and I learned as

much about business when I was nine ten

and twelve as I learned any other time

let's transition to a different subject

with college you went to IU yep right

now you got a lot of people that say

forget about school you know there are

better school they're idiots oh you

think they're River idiot tell me what

if you're gonna have and run a business

if you don't understand accounting

you're already behind the eight ball

can't you hire a guy that's the no seven

then they they still have to communicate

to you your accountant might tell you

you're profitable but your cash is going

down you know not understanding that

breakdown and and when you don't you see

you need college to learn that yeah I

think you do right because it may not

for some people look if you're so

self-motivated that you can take an

online course in accounting and teach

yourself everything you're way ahead of

the game anyways but most people aren't

I don't care if you go to a community

college and take accounting and Bend 99

bucks for the class just you know

spending the money forces you to be more

obligated to do it but accounting

finance lesser extent marketing sales of

the school offers that these are all

that's the language of business and so

while it's possible to teach yourself

these things and while it's possible to

hire them when you're starting your own

company you don't want to have to spend

money hiring an accountant well let me

take that if you've gone through all

these classes if I don't have to hire a

lawyer to incorporate right probably

figure out yourself and so your cost of

opening up a business drops but even

more important and all that that's

that's the blocking and tackling that's

the language of business you know the

thing I learned at Indiana that was more

important than anything else I learned

how to learn and learning became far

more important to me because the one

certainty in business is that it's

always going to be changing if you're

not always learning if to this minute if

I'm not continuously learning if I'm not

just absorbing as much as I can absorb

someone else is going to kick my ass

right so you talked about paranoia

the greatest source of your paranoia

should be knowledge if someone else

knows more than you do and if you're not

learning if you don't know the law if

you don't know how to learn if you don't

have a thirst for learning and acquiring

information you're you're Sol so do you

think like let's just if we put 10 guys

here you interview them okay you could

within a 5 10 minute minute interview

say this dude is not gonna make it as an

entrepreneur yeah I mean I can I can

typically tell right I can tell um but

by their passion I can tell by their

focus I can tell by their preparation

you know there's a whole realm of things

than any business here you know here's

here's the business you're in and here's

a thousand things that influence whether

or not you're going to be successful you

know through my experience in businesses

I can put myself in his position and say

okay here are nine hundred of the

thousand things he has to be aware of

and then go through and ask and by how

many of those or her issues they've been

able to address already that kind of

gives me a sense of how hard they're

willing to work you know and I can tell

by the questions they ask me so all I

have to do is say okay what do you want

to know and you know when they start

saying what should I do they

yeah yeah and that's fine right and I

want them to ask questions but you know

people like to say you know the only

stupid questions are the one you don't

ones you don't ask that's not right

right because the questions you ask tell

me tell whoever more about you than

anything else you do because in

particular tells me about your

preparation if you ask me questions

about just basic things that you should

have known and you should have down to a

science that's gonna disqualify you

almost more than anything do you think

there needs to be a healthy level of

peril absolutely they're nice too oh

yeah I mean I I always say you know for

every one of my businesses I said what

would I do to kick my own ass you're

right so whatever business you have

there's somebody trying to put you out

of business or somebody trying to to

take a bite out of your business and

it's better for you to figure out how

they're going to do it rather than they

do it and so yeah that's being paranoid

and so you have to be paranoid you have

to anticipate other people's next moves

and you can't ever you know downplay the

competition I was at a business plan

competition this morning for at a

college and they were kind of being

dismissive of the competition and so you

can't ever do that you know they're out

there trying to take you down and

they're not just gonna sit still and if

you're good really really good

you're gonna inspire them to work even

harder faster better and so you have to

be you know very self aware of what

you're good at and what other people are

good at and you know a healthy dose of

paranoia makes a bit there at me is very

helpful how does one entrepreneur

increase the speed and areas that they

can increase there's certain things you

can't compete in one way speed of

growing your business all right

so how fast can I grow yeah I mean it

just depends you've got to know your own

skill set right and you've got to know

how that fits within your company's

lifecycle um you know some companies are

slow slow grind and you just have to

understand that and you've just got to

bide your time and still until it starts

to click and then grow with it quickly

you know if you're trying to release a

product that needs to be ubiquitous

you've got to go as fast as you can and

then you know release a product yeah

along yeah and and you know there's a

lot of people say you know perfection is

the enemy of profitability right and

that doesn't mean you have to wait to us

a perfect prod

it really just depends on what the

product is that you know a barbershop

right is in an app is it a service is it

a product but you know the the key is

looking for the low-hanging fruit what

are the app what are what customers are

willing to write you a check or commit

to it you know so that they're willing

to integrate it into their daily lives

or integrated into their daily business

and so getting a commitment either

through time or revenue is typically

what I look for and so if I can get a

commitment then I'm gonna be able to

learn I'm gonna see how they use it to

they sustained usage and then once I get

the next one you know hopefully it came

a little bit faster than the first month

then I can ask for referrals and then

the next one then the next one and I

just try to ramp it up you know when I

bought the Mavs we had no season

ticket-holder race and so literally it

was a matter of just putting a list of

former season ticket holders and a white

pages back then you know on my desk next

to my phone and making phone calls you

yeah me yeah because if I'm not gonna do

it I'll find somebody else to do it

right

so just get on the phone hey this mark

you know I'm the new owner of the Dallas

Mavericks we've you know I'd like to

invite you back blur again it's not

though this is my business you can't get

great the vasila skits or something make

those calls wants to get to a corner you

you're a guy that's a billion you making

those but that's all you know and that's

fine and good right because everybody's

got their own goals right and but still

I don't want anybody at the Mavs to be

able said well he's not willing to do

the work right there's you know if I

walk around I'm picking up all the

papers I'm not saying go get that picked

up my money okay that's trash I'm

picking it up so but in terms of speed

of growth it's really you got to get

that first customer first and then when

you get that first what did you learn

reiterate get that next customer and

then hopefully as you learn more and

more through the process than the next

one the next one the next one becomes

come volume faster

you

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